Written Commentary
by Steve Freed,
Grains are mixed. SN is unchanged and near 8.32. CN is unchanged and near 3.12. WN is down 5 cents and near 5.20. US stocks are higher. US Dollar is lower. Crude is higher. Grain futures continue to find resistance due to drop in demand. So far, US weather is mostly favorable for crops. US stock markets is up 31 pct in April and strongest monthly gain in 100 years. S/P is up 62 pct from March lows with key resistance near 2.950.
Delivery registrations remain near 1 soybean, 564 soymeal, 2,668 soyoil, 3 corn and 11 Chicago wheat. May deliveries are estimated near 250-500 soybeans, 250-750 soymeal, 2,500-3,000 soyoil, 750-1,000 corn and zero Chicago wheat.
US Midwest 6-10 day calls for below normal temps and normal rains. US 8-14 day forecast calls for cooler temps and below normal rains. US south plains will be warm and dry. Europe and Black Sea area could see scattered rains.
Corn market will be watching this week’s US ethanol report. Production should be down. Slight increase in gas use and lower production could finally drop stocks. Drop in ethanol demand, lower livestock margins and lower export demand could add to US supplies and force future lower and spreads wider. July Argentina FOB corn prices are near $138 and lowest since Oct, 2006.
Showers in Europe and N Russia is offering resistance to wheat futures. Drier US south plains weather could offer support. Talk of lower US HRW crop would be friendly to prices if not for talk of better Russia crop conditions, lower Russia wheat prices and slower World food demand. There is a 70-75 cent premium old crop Russia wheat prices to new crop.
Soybean futures have dropped on lack of new China buying US soybeans and talk of lower US soymeal demand and higher US soyoil stocks. Lower US energy demand is also lowering biofuel use. Some look for better 4Q China demand for US soybeans.
On Tuesday, Managed funds were net buyers of 1,000 SRW wheat contracts, sold 5,000 corn, sold 4,000 soybeans, sold 3,000 soymeal and bought 3,000 soyoil. We estimate Managed funds were net long 7,000 contracts of SRW Wheat; net short 181,000 Corn; net short 10,000 Soybeans; net short 10,000 Soymeal and net short 13,000 Soyoil.
Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by ADM. The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared. The information provided is designed to assist in your analysis and evaluation of the futures and options markets. However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc
Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by ADM. The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared. The information provided is designed to assist in your analysis and evaluation of the futures and options markets. However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.
